Great article, but the focal point from Mr. Coons (“It’s an exciting time to be in the insurance business”) just doesn’t reach home. This, to many of us in the agency end, is double-speak.

If there’s a “looming” talent shortage, then why is the compensation schedule for agents being “taken to the wood shed”? Virtually every company has the attitude that commission is where to make up for excessive claims payments and bloated home office/management staff. I’ll offer two examples:

First, a large regional MGA was offering a “spiff” to agents as an incentive to write business. It worked so well that they increased the spiff and it was an even bigger hit. Well, along came the early 2000’s and the companies were having to take rate. These being non-admitted companies, the product was not nearly as rate-sensitive as a standard market would be, and generally the agents controlled this business. The MGA sent a letter to all their agents, whining about “though times” and that they were also cutting the spiff in half to help with costs. I wonder if, as an agent, if I’d have lost ANY business for the extra $10 in costs?

Second example: I recently had a conversation with the President of a regional insurance carrier who decided, due to losses, to raise rates in a particular state, and to lower commissions to agents as part of the “austerity measures”. The cut was a 30% decrease in NB commission, and a 33% cut in renewals. Two years later, the company returned with another cut in commission, making the total a 40% cut in commission. (Keep in mind, that average commission started at about $160 and eventually went down to $96, an average decrease of $64, while the policy rate increased by about 15%.) My question to him was: “What did your wife say, and what did your staff say when you informed them that their compensation was just decreased by 40%??? Unfortunately his response sounded like Hillary Clinton when asked about the Benghazi deaths.

My point is that if we want new blood in the insurance biz, we’re not just going to have to challenge the home office folks, but we’re going to have to treat the agency force as if they have value! Having been an agency owner for 25 years, I would tell potential agents not to walk, but RUN for the doors. Companies DO NOT APPRECIATE AGENTS!

To all you CEO’s in the industry: Whatever happened to the great trips and profit-sharing incentives that formerly pervaded the industry?? If the agent does not sell something, ALL THE REST OF YOU MAY AS WELL GO HOME! My suggestion to the company president mentioned before: RAISE COMMISSION to the top in the industry – then you get to look at all the business FIRST and you can “cull” what you don’t want. Otherwise you are looking at adverse selection (and, as I predicted, this company has lost most of it’s business in that state).

Companies, your agents are full of this great info…just ask them (and LISTEN).

Dear RJ:
I’ve been working on the carrier side for over a decade. I appreciate and understand your comments and I’m fortunate that I work for a carrier that pays pretty good commissions and still has the incentive trips for our top agents.

Since you took a pretty big swipe at carriers I’ll take a big swing at agents. The reason I left the agency side was that I was tired of getting screwed.

I started my career as a captive agent and did OK. I decided to get make a move, was offered 3 positions with local agents and took one with a bank agency in the late 90’s.

And got screwed. I found out very quickly that the bank was not serious about insurance. Was promised things that were never delivered. Realized within a month that I had made a serious mistake, stuck it out for almost a year. Thank God that a recruiter from one of the other agencies reached out to me again so I switched to another agency.

And got screwed again. Started at $35k, when I left for a carrier 3 years later was making $36k. More than doubled my salary with NB revenue each year I was there. Consolidated carriers to make management of PL and small commercial book easier, generated a $70k bonus check from one of those carriers as a result. Was a resource to everyone in their marketing department but management always wanted more, more, more. This was/is a large agency (300+ employees) and I discovered that those at the top were handsomely paid, everyone else was paid peanuts. I got one review in the 3 years I was there with a paltry $1,000 raise. I was replaced by 3 employees after I left, I knew I was overworked. Mediocre benefits, stressful work environment, poor pay.

First carrier: salary nearly doubled in 5 years, two promotions, top performer, great benefits. Second carrier: one promotion in 5 years, salary up 25% in that term, company car, went on a great incentive trip to Hawaii. I’m again a top performer.

Funny how with carriers I’ve been recognized as a top performer, on the agency side whatever I did was never enough even though I was usually at or near the top for sales/NB revenue.

So back to you: are you paying your workers good wages? Benefits? If yes, congratulations, you are one of the few agents I’ve heard that does so. From my experience the agency side is not worth the hassle.

Worked with some of the nastiest down right mean people I have ever encountered when I worked on the Agency side. It surprised me how bad tempered these folks were. I dealt with retail agents most of my career and most of them were very courteous and a pleasure to deal with. Until I worked for a couple. Wow!